CL&P Quietly Increases Self-Managed Portion of Default Service, Retail Suppliers Cry Foul

Retail suppliers have protested the non-transparent manner under which Connecticut Light & Power has increased its self-managed portion of Standard Service load from 20% to 30%.

In a June 2012 decision, PURA authorized CL&P to self-manage the procurement of 20% of its Standard Service load for the second half of 2013.

Information filed by CL&P concerning its self-management activities has been granted confidential treatment.

Subsequently, the Retail Energy Supply Association learned that the Connecticut procurement manager authorized CL&P to increase the percentage of Standard Service load that it self-manages to 30% for 2014.

"However, there was no proceeding conducted in connection with this decision nor was any notice of such an increase provided," RESA said.

"When the Standard Service procurement rules were first established, the Authority found that '[t]he process must be transparent and open to ensure the best possible results for consumers and for inspiring public confidence in the results.' Despite this, CL&P's self-management activities are anything but transparent and open. Indeed, all of CL&P's self-management activities have been conducted outside the public process and, in many case, even the public's view," RESA said.

"First and foremost, it is RESA's understanding that CL&P has been undertaking the self-management activities that were authorized by the Decision. However, RESA is only aware that such activity is occurring because of passing references in two other filings made on record in this proceeding. All other filings and communications related to CL&P's self-management activities are being conducted off the record without any notice to other participants in the proceeding that such filings or communications are even occurring. Moreover, the one and only filing that was made on the record regarding CL&P's self-management activities was done subject to a protective order. Thus, the substantive information contained in that filing is also not available for public review and scrutiny," RESA said.

"[C]reating a 'black box' regarding CL&P's self-management activities will make meaningful review of those activities nearly impossible," RESA said.

RESA said that, "CL&P may be submitting information to the Authority and/or the Manager confidentially that does not satisfy the requirements for protective treatment under FOIA or under the Authority's ruling."

"For instance, after the CL&P Motion was granted, CL&P submitted updated documentation to the Authority subject to the protective order, including the 'Proposed Format for Monthly CL&P Procurement Report.' However, it is not clear how the proposed format of a report qualifies as a trade secret or how it qualifies as an Outline of CL&P's Portfolio Management Plan or a Presentation of CL&P's Proprietary Strategy and Analysis, which is all of the information for which CL&P was authorized to receive protective treatment," RESA said.

Consistent with disclosure for third-party suppliers of default service, RESA said the following information regarding CL&P's self-management, with references to particular counterparties or generating assets redacted, should be disclosed after 90 days has elapsed:

• A list of all term megawatt (MW) block purchase transactions, including MWs purchased, dates of transactions, start date, end date, and transaction price;

• A list of any other energy hedge transactions (e.g., options, swaps, derivatives, load-following contracts, natural gas or heat rate hedges used to manage power price volatility, unit-contingent supply contracts, etc.), including volume purchased, dates of transactions, start date, end date, and transaction price;

• Megawatt Hour (MWh) Volume settled in Day Ahead (DA) Market, percent of total Standard Service MWh, and load-weighted average DA settlement price for the month;

• MWh Volume settled in Real Time (RT) Market, percent of total Standard Service MWh, and load-weighted average RT settlement price for the month;

• Any Financial transmission rights costs or credits;

• All non-energy costs incurred, including capacity costs, ISO-NE ancillary costs, and Renewable Portfolio Standard costs;

• All CL&P transaction, administrative, and overhead costs related to the above; and

• A reconciliation between the aggregate of the cost items listed above with the Standard Service rate for the applicable month.

Citing prior statute and orders, as well as previous testimony suggesting PURA approval would be needed for changes to the self-managed portfolio percentage, RESA also alleged that, "the Manager's apparent unilateral increase of the load that CL&P is permitted to self-manage appears to violate the statutorily provided, procedural requirements for amending the Plan."

Docket 12-06-02